How Much Would Electric Cars Cost The Uk?

How much would electric cars cost the UK?

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According to research conducted by, the government would lose over £24 billion in tax every year if every motorist in the UK chose to drive an electric vehicle rather than a petrol/diesel-fuelled one.

The biggest loss in tax collection that the government would endure would come from fuel duty, which makes up a whopping 80 percent of the aforementioned total figure.

The government would also lose just under £5 billion from road tax charges and close to £37.5 million from car insurance sales - as car insurance premiums are, on average, around 5 percent cheaper for environmentally friendly car owners, than those who opt for non-electric vehicles.

The savings that would possibly be available to each motorist, however, would be slightly less substantial; with the average driver being able to reduce their overall annual motoring costs by just under £1,000.

According to the figures on the infographics, there are currently over 31 million cars on the road in the UK, which would make suddenly replacing every car with an electric one a very tough feat.

By using the worldwide average fuel and electric consumption figures, with the worldwide average number of miles driven per year, we can see that the average fuel cost for driving a petrol-fuelled car is £1.42; whereas the average cost per kWh is only £0.1439 for electric cars - a Nissan Leaf was used as the example in the study.

In terms of the UK, every driver choosing to drive an electric car would mean that the government would face, just under, a £20 billion loss in fuel duty. This would be the single greatest loss in tax that the government would take if we witnessed an 'electric car revolution'.

However, the government would still manage to claw some of this money back, as they would still be able to gain tax on all of the electricity that was used to charge the cars. The government would manage to gain just under £420 million worth of tax from the extra electricity used.

As well as making savings on their annual fuel costs, drivers of greener electric cars could also benefit from cheaper car insurance deals. Usually, green car users can save up to around 5 percent on their insurance premiums.

This means that the government would see a tax shortfall of around £37 million, with a further £5 billion lost out on tax due to electric cars being exempt from road tax. Both of these totals would leave a black hole in the government's kitty.

Public transport in London would also suffer, as the congestion charge that is currently in place pumps all of the money raised back into that sector. As electric cars, such as the Nissan Leaf, qualify for a 100 percent discount and are exempt from the charge, they can enter the city for free.

Due to this, the government would not even raise a penny from the congestion charge, instead missing out on around £130 million - which the congestion charge is estimated to raise each year.

Save on New Cars is a trading name of Auto Network (GB) limited. Auto Network (GB) is part of The Lead Agency Group.